August 17, 2018

China's WH Group incurs $15M loss in its US pork operation

Chinese pork firm WH Group's fresh meat business in the US suffered financial losses in the first half of this year as a result of the trade war between the world's two largest economies, and it plans to sell more products to other markets outside of China.

"We will increase exports to places other than China," Wan Long, chairman and CEO of the world's largest pork company, was quoted as saying in a report by Nikkei Asian Review.

Markets being considered for increased shipments from the US are Japan, South Korea and Mexico, while pork sourced from China will remain in the local market for now, he added.

According to the report, the firm's American fresh meat business incurred $15-million pretax loss during the first six months, reversing a $199-million profit during the same period last year.

In April, China imposed a 25% retaliatory tariff on American pork products after the US slapped duties on Chinese exports. The Nikkei Asia Review reported that WH Group's stock price has fallen roughly 30% this year on the Hong Kong Stock Exchange.

The American fresh meat business apparently caused only a dent on overall profitability as the company's total sales, according to Wan, grew 5% year-on-year to $11.17 billion in the first half, with net profit up 13% to $557 million.

WH Group achieved its status as the world's top pork processor after its acquisition of the US-based Smithfield Foods in 2013. Besides China, Asia and the US, it operates in Europe.